In June 2016 we sent out an alert regarding the changes in the Income Tax Act which stated that the tax advantages of a common corporate structure used by professionals, using two professional corporations, will be eliminated for fiscal years starting after March 22, 2016. As a result, we recommended that professionals using this structure consider amalgamating their professional corporations. It is now to time look into starting this process.
To amalgamate two professional corporations for the new year, prior authorization will need to be obtained from your regulating body and documents will need to be filed before January 1, 2017. While January may seem very far away now, given we anticipate many professionals will be seeking to amalgamate their professional corporations given the new tax rules, we recommend you start the process as soon as possible to ensure there is enough time to prepare all the necessary documents and obtain all the necessary approvals.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.